Hardie-Tynes Co Inc v. SKF USA Inc
MEMORANDUM OPINION AND ORDER DENYING 31 MOTION for Leave to File Amended Complaint. Signed by Judge Virginia Emerson Hopkins on 6/5/2017. (JLC)
2017 Jun-05 PM 02:17
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
HARDIE-TYNES, CO., INC.,
SKF USA, INC.,
) Case No.: 2:16-CV-1417-VEH
MEMORANDUM OPINION AND ORDER
Pending before the court is Plaintiff Hardie-Tynes, Co., Inc.’s (“Hardie-Tynes”)
most recently filed Motion for Leave To Amend Complaint (Doc. 31) (the “Motion”),
which seeks to add a claim for fraudulent suppression against Defendant SKF USA,
Inc. (“SKF”) pursuant to Rule 15(a)(2). (Doc. 31 at 1-2 ¶ 1); (see also Doc. 31-1 at
9-12 ¶¶ 31-46). SKF opposed the Motion (Doc. 33) on April 6, 2017, on several
different grounds, including futility. Hardie-Tynes followed with its reply (Doc. 35)
on April 13, 2017. For the reasons discussed below, Hardie-Tynes’s Motion is
“The court should freely give leave [to amend a complaint] when justice so
requires[,]” FED. R. CIV. P. 15(a)(2), but “need not” do so “where amendment would
be futile.” Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001). Amendment is
futile when “the complaint as amended is still subject to dismissal.” Hall v. United
Insurance Co., 367 F.3d 1255, 1263 (11th Cir. 2004) (internal quotation marks
omitted) (quoting Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir.
1999)); see also St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198 F.3d
815, 822 (11th Cir. 1999) (“When a district court denies the plaintiff leave to amend
a complaint due to futility, the court is making the legal conclusion that the
complaint, as amended, would necessarily fail.”). Thus, the Rule 12(b)(6) standard
is an integral component of the futility doctrine. See B.D. Stephenson Trucking,
L.L.C. v. Riverbrooke Capital, No. 5:06-CV-0343-WS, 2006 WL 2772673, at *6
(S.D. Ala. 2006) (“[T]hus, if the amended complaint could not survive Rule 12(b)(6)
scrutiny, then the amendment is futile and leave to amend is properly denied.” (citing
Burger King, 169 F.3d at 1320)).
A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. See FED.
R. CIV. P. 12(b)(6) (“[A] party may assert the following defenses by motion: (6)
failure to state a claim upon which relief can be granted[.]”). The Federal Rules of
Civil Procedure require only that the complaint provide “‘a short and plain statement
of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is
and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99,
103, 2 L. Ed. 2d 80 (1957) (footnote omitted) (quoting FED. R. CIV. P. 8(a)(2)),
abrogated by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955,
1965, 167 L. Ed. 2d 929 (2007); see also FED. R. CIV. P. 8(a) (setting forth general
pleading requirements for a complaint including providing “a short and plain
statement of the claim showing that the pleader is entitled to relief”).
While a plaintiff must provide the grounds of his entitlement to relief, Rule 8
does not mandate the inclusion of “detailed factual allegations” within a complaint.
Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 (quoting Conley, 355 U.S. at 47, 78 S.
Ct. at 103). However, at the same time, “it demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). “[O]nce a claim has been
stated adequately, it may be supported by showing any set of facts consistent with the
allegations in the complaint.” Twombly, 550 U.S. at 563, 127 S. Ct. at 1969.
“[A] court considering a motion to dismiss can choose to begin by identifying
pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth.” Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950. “While legal
conclusions can provide the framework of a complaint, they must be supported by
factual allegations.” Id. “When there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to
an entitlement to relief.” Id. (emphasis added). “Under Twombly’s construction of
Rule 8 . . . [a plaintiff’s] complaint [must] ‘nudge [any] claims’ . . . ‘across the line
from conceivable to plausible.’ Ibid.” Iqbal, 556 U.S. at 680, 129 S. Ct. at 1950-51.
A claim is plausible on its face “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949. “The plausibility
standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at
556, 127 S. Ct. at 1965).
Finally, the Eleventh Circuit “review[s] the district court’s denial of a motion
to amend a complaint for abuse of discretion.” Steger v. General Electric Company,
318 F.3d 1066, 1080 (11th Cir. 2003); see also Henson v. Columbus Bank and Trust
Co., 770 F.2d 1566, 1574 (11th Cir. 1985) (“A district court has great discretion when
determining whether an amendment to the complaint should be allowed once
responsive pleadings have been filed.”).
As mentioned above, Hardie-Tynes’s Motion seeks to add a claim of fraudulent
suppression to its complaint. The elements of fraudulent suppression claim under
Alabama law are “(1) that [SKF] had a duty to disclose the existing material fact; (2)
that [SKF] suppressed this material fact; (3) that [SKF]’s suppression of this fact
induced her to act or to refrain from acting; and (4) that [Hardie-Tynes] suffered
actual damage as a proximate result.” State Farm Fire & Cas. Co. v. Owen, 729 So.
2d 834, 837 (Ala. 1998) (citing Booker v. United American Ins. Co., 700 So. 2d 1333,
1339 (Ala. 1997)). Additionally, the Code of Alabama clarifies that:
Suppression of a material fact which the party is under an obligation to
communicate constitutes fraud. The obligation to communicate may
arise from the confidential relations of the parties or from the particular
circumstances of the case.
Ala. Code § 6-5-102.
SKF raises four reasons why the court should deny the Motion: (1) HardieTynes’s fraudulent suppression claim “is so confusing as to render a meaningful
response nearly impossible” (Doc. 33 at 3 (underlining omitted)); (2) “[Hardie-Tynes]
has not properly pled the purportedly suppressed material fact(s)” pursuant to the
requirements of FED. R. CIV. P. 9(b) (Doc. 33 at 4 (underlining omitted)); (3) “SKF
had no duty to disclose the purported material fact(s)” (id. at 5 (underlining omitted));
and (4) Hardie-Tynes’s complaint lacks allegations showing “other circumstances …
[to support] a duty to disclose[.]” (Id. at 8 (underlining omitted)). The court turns to
SKF’s third and fourth arguments first and finds, as discussed in more detail below,
that Hardie-Tynes’s fraudulent suppression claim is futile due to the absence of facts
establishing a plausible duty to disclose.
“The question whether a party had a duty to disclose is a question of law to be
determined by the trial court.” Barnett v. Funding Plus of Am., Inc., 740 So. 2d 1069,
1074 (Ala. 1999) (citing Owen, 729 So. 2d at 838). In deciding this threshold issue,
a court must consider:
(1) the relationship of the parties; (2) the relative knowledge of the
parties; (3) the value of the particular fact; (4) the plaintiff’s opportunity
to ascertain the fact; (5) the customs of the trade; and (6) other relevant
Owen, 729 So. 2d at 842-43; see also Sirmon v. Wyndham Vacation Resorts, Inc., 922
F. Supp. 2d 1261, 1285 & n.19 (N.D. Ala. 2013) (same) (citing Owen, 729 So. 2d at
842-43). Concerning parties that have a commercial relationship, the Supreme Court
of Alabama has recognized that “[w]hen the parties to a transaction deal with each
other at arm’s length [and] with no confidential relationship, no obligation to disclose
arises when information is not requested.” Bama Budweiser of Montgomery, Inc. v.
Anheuser-Busch, Inc., 611 So. 2d 238, 246 (Ala. 1992) (citing Norman v. Amoco Oil
Co., 558 So. 2d 903 (Ala. 1990)).
The court has studied Hardie-Tynes’s proposed amended complaint (Doc. 31-1)
and concurs with SKF that the pleading lacks plausible facts to show that Hardie-
Tynes and SKF had a confidential relationship. (Doc. 33 at 8). Additionally, the
proposed amended complaint reflects that Hardie-Tynes and SKF dealt with each
other in an arms-length manner. (See Doc. 31-1 at 5 ¶ 17 (“Under the terms of the
June 16, 2011, Purchase Order issued by Hardie-Tynes to SKF, the Seller (SKF) was
to: . . . .”)). Finally, nothing alleged in the amended complaint plausibly establishes
that “[Hardie-Tynes] requested any information from SKF or that SKF failed to
disclose any information requested of it.” (Doc. 33 at 8 (emphasis omitted)).
In reply, Hardie-Tynes does not dispute SKF’s description of the allegations
contained in the proposed amended complaint, the parties’ arms-length dealings with
each other, or the holding in Bama. Hardie-Tynes, instead, contends that the court
should disregard the authorities cited by SKF, including Bama, because they were not
decided on a Rule 12(b)(6) record. (Doc. 35 at 7-8). In making this argument,
however, Hardie-Tynes has not cited to any case which shows that it would be error
for this court to rely upon summary judgment opinions when deciding the plausibility
of Hardie-Tynes’s fraudulent suppression claim and, more specifically, the
sufficiency of the duty-to-disclose element, which issue–as explained above–is a legal
matter for the court to resolve. Therefore, the court is unpersuaded by Hardie-Tynes’s
position that its Motion should be granted merely because the duty-to-disclose section
of SKF’s opposition lacks examples of cases decided on a Rule 12(b)(6) basis.
Hardie-Tynes also points to the following allegation as sufficient to show
fraudulent suppression that would possibly trigger a duty to disclose under Alabama
law: “Good news SKF has many years experience with plain bearings in bridges in
Europe and particularly in Holland.” (Doc. 35 at 8); (see also Doc. 31-1 at 9 ¶ 32).
Citing to Brasher v. Sandoz Pharm. Corp., No. CV 98-TMP-2648-S, 2001 WL
36403362 (N.D. Ala. Sept. 21, 2001), Hardie-Tynes states that “[i]n making this
representation, SKF undertook a duty to respond truthfully and not to suppress or
conceal facts which would qualify this representation.” (Doc. 35 at 8); see also
Brasher, 2001 WL 36403362, at *10 (“[E]ven though one may not have a duty to
disclose certain facts, if he ‘undertakes to do so, either voluntarily or in response to
inquiries, he is bound not only to state truly what he tells, but also not to suppress or
conceal any facts within his knowledge which will materially qualify those stated.’”
(quoting Jackson Co. v. Faulkner, 315 So. 2d 591, 600 (Ala. Civ. App. 1975))).
To the extent that Brasher found that Alabama law will impose a duty to
disclose based upon a party’s voluntarily making misleading statements, the court
finds that Brasher is significantly distinguishable. First, Brasher involved
circumstances distinctly different from parties dealing with each other in an armslength commercial setting. Instead, the plaintiffs in Brasher were pursuing fraud
claims against a pharmaceutical company defendant for misleading disclosures made
about the safety of a particular drug. Additionally, the Brasher court evaluated the
existence of a duty under the Alabama factors and found that the defendant “had a
duty under federal law to disclose certain reports of adverse reactions to the FDA and,
thereby, to doctors and patients” and that the defendant had superior knowledge about
the adverse risks associated with taking the drug. 2001 WL 36403362, at *10.
“Considering all of the factors and ‘relevant circumstances’ as required by Alabama
law, the court [then] f[ou]nd that Sandoz had a duty to disclose to prescribing
doctors the known hazards of ingesting its drug, and that it failed to do so.” 2001 WL
36403362, at *11.
The court has also reviewed the cases upon which Brasher is based and finds
that they, too, are much different than the commercial circumstances presented here.
For example, Jackson involved a fraudulent suppression claim by a purchaser of land
against a real estate company with superior knowledge about whether the land “was
suitable for a septic tank[,]” including the corporate defendant’s possession of a letter
from the Jefferson County Department of Health withdrawing approval for septic
tanks for the subdivision where the lot was located. 315 So. 2d at 599, 593-94.
Further, the Jackson court made it clear that “[w]e should not be interpreted as
holding that a confidential or fiduciary relationship exists between all buyers and
sellers.” 315 So. 2d at 599.
Even more removed, Gold Kist, Inc. v. Brown, 495 So. 2d 540, 541, 542 (Ala.
1986), involved an “appeal from an order of the trial court granting a new trial to
plaintiffs” on the basis of a juror’s misleading response to a question during voir dire.
Finally, Cunningham v. H.A.S. Inc., 74 F. Supp. 2d 1157 (M.D. Ala. 1999), merely
recognized, citing to Gold Kist, that “[t]he failure to tell the whole truth or to give a
partially correct answer may be a fraudulent concealment . . . .” id. at 1162 n.6
(emphasis added) under Alabama law, but did not delve any further as there was no
pleaded fraudulent concealment claim in that action. Therefore, this court finds that
Brasher and the cases upon which Brasher relies are simply inapplicable under the
circumstances of this commercial dispute. Instead, Bama controls and Hardie-Tynes’s
fraudulent suppression claim is implausible because no cognizable duty to disclose
exists as a matter of Alabama law. Alternatively, in assessing the Alabama factors
identified in Owen, Hardie-Tynes has not stated facts that are sufficient to plausibly
support a duty to disclose based upon other circumstances.
Thus, Hardie-Tynes’s Motion is DENIED as futile.
DONE and ORDERED this the 5th day of June, 2017.
VIRGINIA EMERSON HOPKINS
United States District Judge
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